Can technology boom awaken the Asian Tigers?

The boom of the technology sector is becoming a new set of fangs for the Asian tigers.

Technologies like mobile phones, IoT, AI and blockchain are becoming ubiquitous in Asia. According to research released by Duff & Phelps, the valuation for global tech is dipping, but the estimations for South East Asia (SEA) remains resilient. SEA is made up of a young and tech-savvy population, and more start-ups leverage online tools to reach out to them; the estimated market growth size for E-Commerce in SEA is 261% between the year 2016 – 2021.

SEA is, without doubt, a key player in driving the technology growth.

Visual Capitalist illustrates the growth in SEA’s digital market

Due to the lack of banking infrastructure in SEA, most of the consumers prefer to use cash/credit card during transactions. Visual capitalist suggests that the rise of mobile devices will enable SEA to catapult from the old ways and welcome a new era of mobile payments. Gojek is not only the ‘Uber’ of SEA but also the epitomes of digitalising payment systems.

During the Singapore FinTech Festival, Mr Ravi Menon expressed his views on the omnipresence of technology:

“When the FinTech journey first started in 2015, a Smart Financial Centre was imagined where innovation and technology are pervasive. MAS hopes to create a world where financial services are built around our life and around our needs – where identity is human, payments are invisible, insurance is intuitive and financial advice is integrated. With this, our financial sector would be one that is customised for our needs, invisible to our eyes and an absolute delight.”

In the past, transferring money back to the ancestral land is costly and unsafe for foreign workers. Through Project Ubin, Singapore is exploring more efficient methods in cross-border payments with a consortium of financial institutions. The Project Ubin team has successfully achieved a decentralised network of payments while preserving transactional policy.

The findings solve the pain points of cross-border payment for banks, businesses and individuals; the bank could bypass Monetary Authority of Singapore (MAS) and pay each other with a blockchain based digital representation of SGD.

The emergence of new technology as such has provided SEA opportunities for innovation and breakthrough in technology.

“Countries across Asia are at different phases of their economic development, which creates opportunities for local governments and businesses to explore diverse use cases for blockchain.

In this region, industries that are exploring the use of blockchain includes financial services, supply chain and health care to improve transparency and efficiency,” Mr Jimmy Ong, EY Asean Blockchain Leader, said during an email interview with Block Asia.

Apart from the proliferation cutting edge technology in Asia, investors are eyeing to be a stakeholder in the ‘technology’ rush. In June 2017, technology has outweighed financial as the largest sector on MSCI Asia ex-Japan index.